Jit purchasing arrangements-jit benefits, Managerial Accounting

Assignment Help:

JIT purchasing arrangements

JIT philosophy also extends to adapting JIT purchasing techniques whereby delivery of material immediately precedes their use. By arranging with suppliers for more frequent deliveries stocks can be out to a minimum
Considerable savings in material handling expenses can be obtained by requiring suppliers to inspect materials before their delivery and guarantee their quality.

This improved service is obtained by giving more business to fewer suppliers and placing long tern purchasing orders, therefore the suppliers has an assurance of long term sales and can plan to meet this demand.

Companies that have executed JIT purchasing techniques have claimed to substantially reduce their investment in raw materials and work in progress stocks.

Other benefits comprise:

1. Considerable savings in factory space.
2. Big amount discount.
3. Savings in time from consulting with less suppliers
4. Reduction in paper work arising from issuing (long term orders) to a few suppliers rather than individual purchase order to many suppliers.


Related Discussions:- Jit purchasing arrangements-jit benefits

Five stakeholder groups, Private sector companies have multiple stakeholder...

Private sector companies have multiple stakeholders who are likely to have divergent interests.( five stakeholder groups and  discuss their financial and other objectives).

Moral Law vs. Tax Law, 1. Do you think that the tax minimization scheme ...

1. Do you think that the tax minimization scheme described to Debbie Kishimoto is in harmony with the ethical behavior that should be displayed by top corpo- rate executives? Wh

Cash planning, Firms need cash to invest in inventory, receivables and fixe...

Firms need cash to invest in inventory, receivables and fixed assets and to create payments for operating expenses, so as to increase earnings and sales and make sure the smooth ru

Product mix decision when capacity constraints exist, a certain company mak...

a certain company makes 3 products A,B and C and they use the same raw material zhong.details about each product is as follows.production units are 10 000 for A,8 000 for B,12 000

Process Inventory, Hoe to find the cost of goods transferred under weighted...

Hoe to find the cost of goods transferred under weighted average method

Evaluate a proposed investment, Q. Evaluate a proposed investment? BMP ...

Q. Evaluate a proposed investment? BMP Consulting (BMPC) conducted an analysis of Delta Corp. and found that the firm consists of two different divisions: Pet Lovers, a pet sup

Determine the tyoes of cost centre, Determine the tyoes of Cost centre ...

Determine the tyoes of Cost centre Cost centre can be of two kinds: 1. Impersonal cost centre: consisting of a location or item of equipment (or group of these) like machi

Job order costing, Morrow Company applies overhead based on direct labor ho...

Morrow Company applies overhead based on direct labor hours. At the beginning of the year, Morrow estimates overhead to be $620,000, machine hours to be 180,000, and direct labor h

The incredible game theorist, The Incredible game theorist Mr. Nash's w...

The Incredible game theorist Mr. Nash's work needed refining. First, it applies to games played only once, or in which players move simultaneously. But virtually all interestin

Economies or diseconomies of scale , Economies or Diseconomies of Scale ...

Economies or Diseconomies of Scale The costs of a value activity are often subject to economies or diseconomies of scale. Economies of scale occur from the capability to perfo

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd